Can Obama survive cheap oil?
God bless oilThere are times when I think the whole green movement is going to accomplish nothing, but lots of lost cash. Why?
Not long ago Brazil announced a major oil find. Such finds, and a number of other factors, have some energy analysts predicting a possible, although short term, glut in the oil market within the next decade. Yet, such gluts can last years.
Today, oil prices fell $4.00 on falling demand and an increase in inventories, and Valero warned that it might actually have to shut down refineries due to lack of demand.
Oil supply is overwhelming demand, and with several months of a severely recessed economy almost a certainty, it's hard not to assume that supply could overwhelm demand for the next few years.
Couple that with potential new oil supplies, such as those in Brazil, or new operations in Libya, for instance, and a serious glut in oil demand could be imminent. The oil market has experienced such cycles in the past. Eventually, that has to mean lower gas prices.
Sure, cheap prices are unsustainable. Yet, how many Americans will continue to support Obama's green, efficient plans for autos if gas is cheap for the next four years?
Without a permanent floor on gas, it seems that Obama's green plans could come back to haunt Obama, and the green movement. Inevitably, cheap gas is not good for America. It's like smoking. It's a cancer upon our society. And, at some point one must ask is gas really cheap?
Forget the trillions we'll spend in Iraq. Today, it costs many billions for the Coast Guard and Military to secure US oil lanes out of the Persian Gulf - even at peace time - yet, those costs have never been included at the pump. Why?
Foreign oil has costs. It's time to accept them. It's time for a new gas tax - a tax the government returns to consumers via tax credits for compliant vehicles.
Labels: Foreign Oil Dependency, gas tax
posted by Dahcredyns at
12:11 PM
7 Comments:
"Forget the trillions we'll spend in Iraq. Today, it costs many billions for the Coast Guard and Military to secure US oil lanes out of the Persian Gulf - even at peace time - yet, those costs have never been included at the pump. Why?
Foreign oil has costs. It's time to accept them. It's time for a new gas tax - a tax the government returns to consumers via tax credits for compliant vehicles."
Excellent point.
I wonder. Conservatives don't like taxes, but they love them some military spending. I wonder if Obama could frame a gas tax as a "military tax"? You know, right now the gas tax is understood as a highway construction tax. What if Obama changed the debate so that a gas tax is understood as an overseas military tax, directly funding our efforts in the Middle East and around the world to protect our access to oil and other natural resources.
I think the fundamental point is that 50%+ of our taxes go to the military every year, and yet most people never think about that. And the GOP has people up in arms about welfare, when it is probably 10% of where our taxes go, if that much. Probably 1%.
Well, if we want to continue having a military, if the GOP loves them some military power so much, well, lets be transparent about how we fund that.
Added bonus: All those full size pick up truck drivers can feel good about filling up their tank every three days. They're supporting the troops!
No doubt there are huge military issues here.
Still, I think you can appeal to many conservatives that a gas tax fights foreign oil dependency, while strengthening the US economy. Yes, there will be a little pain initially, but a lot of gain in the long run.
Frame the debate around making America stronger, not about global warming.
Cheap oil is actually a good thing for introducing relatively more expensive carbon neutral synfuels into the economy-- if those synfuels are federally mandated to be a component of all hydrochemical fuel sold in this country.
Since its extremely unlikely that synfuels could completely replace petroleum fuels within a decade or even two decades, requiring that all fuels sold in this country contain a percentage of carbon neutral gasoline, diesel fuel, and jet fuel would be a great way to create a huge carbon neutral synfuel industry in this country-- without raising taxes.
Marcel F. Williams
http://newpapyrusmagazine.blogspot.com/
Marcel-
I'm not very knowledgeable about synfuels, although I recall a Pop Mechanics article - I think - that found that synfuels would be far insufficient to replace oil.
Still, that really isn't an argument against your point.
However, thus far, Obama's plan is a new grid to support alternative energies and the electrification of the automobile.
If you're going to spend 100's of billions towards making this happen, then we should bring consumers into the equation with a gas tax that that consumers can use to buy into electrification. Likewise, it ensures this investment won't be wasted, as it was essentially under the Carter administration, whom tried a green revolution during his tenure as well.
Marcel,
I think the mandate option is THE key government power, and as you hinted a better alternative than taxes in many cases.
I'm for a gas tax, of course, but I also want key strategic mandates. As you wrote they don't involve taxes, redirect PRIVATE investment, and are simply a type of market mechanism.
CAFE standards are a mandate that needs to be redone, but I'm sure there are other mandates that are key. Renewable energy mandates like CA's 20% renewable electric energy production by 2020, are another. CA's AB320(?) carbon reduction mandate will be key. LA's Clean Ports mandate, your Synth Fuel mandate, all those and more should be looked at and rolled out strategically.
These mandates force American industry to innovate to meet new market conditions, and are a tool I hope the Obama administration wields early and often.
Dahcredyns - The tiny country of New Zealand use to produce 600,000 tonnes of gasoline annually from methanol during the last energy crisis during the 1980s using Mobil Oils MTG process until petroleum prices became low again.
You can use urban biowaste (garbage and sewage) to make methanol and then you can covert the methanol into high octane gasoline. That would supply about 5% of our gasoline needs. If rural biowaste from farms and forest were added then about 10% of our gasoline needs could be met. Still 80% of the CO2 in this process is wasted. But if you add hydrogen produced from electricity and water from nuclear power plants or hydroelectric power plants to the process then about 50% of our gasoline needs could be met.
If we extracted additional CO2 from the atmosphere then all of our transportation fuel and industrial chemical needs could be met through nuclear and hydroelectric resources. This would require about 1000 additional nuclear reactors, however. The US currently has about 103.
See my article on this subject 'Gasoline from Air and Water':
http://newpapyrusmagazine.blogspot.com/2008/11/gasoline-from-air-and-water_24.html
Marcel
http://newpapyrusmagazine.blogspot.com/
Cheap oil is a wonderful thing because it allows our economy to grow and we become more wealthy. Only wealthy people can afford to be "green."
I don't think hybrid cars are the answer to anything for the environment. The metals required to produce batteries are some of the worst environmental disasters you can think of, and getting to battery materials requires the type of mining that eco heads used to rip the coal companies for doing.
The real solutions are immediately switching to diesel. Current tech supports it, current supply lines, the cars are big & safe and we could cut oil use by roughly half and never bat an eye. Then we can work on better things like NGV, etc.
Batteries are ridiculous for powering cars. Maybe not in all situations, but as a blanket statement they aren't as good as other options.
We've got hundreds and hundreds of years old in shale & other places, etc. We don't even need middle east oil, but did you guys ever think it's a strategy to use up their resources first? This debate also assumes oil comes from fossils, which the Russian's haven't believed for 50 years.
The most environmental car would be a low tech car, like say, a 1985 Mercedes Benz diesel that lasts for 30 years. Not a whiz bang prius that lasts 7 years. Think of the people mining, working, welding, painting, shipping, selling, etc. all these cars.
I know it isn't reality, but just think if cars lasted 30 years and were simple like they used to be. Much more Earth friendly.
Just always remember what metal mining does to the Earth as you're advocating all these hybrids.
Post a Comment
<< Home